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Trade Blocks and the Gravity Model: Evidence from Latin American Countries

Author

Listed:
  • Carrillo-Tudela, Carlos

    (University of Essex, UK)

  • A Li, Carmen

    (University of Essex, UK)

Abstract

We apply the gravity model to examine the effects of the Andean Community and Mercosur on both intra-regional and intra-industrial trade in the period 1980- 1997. After accounting for size distance and competitiveness effects, the Andean Community preferential trade agreements had a significant effect on the reference products but only a marginal effect on the differentiated products, in particular capital-intensive goods. Mercosur preferential trade agreements had a significant positive effect only on the capital-intensive subcategory of the reference products.

Suggested Citation

  • Carrillo-Tudela, Carlos & A Li, Carmen, 2004. "Trade Blocks and the Gravity Model: Evidence from Latin American Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 667-689.
    • Handle: RePEc:ris:integr:0284
    as

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    More about this item

    Keywords

    gravity model; bilateral trade; trade blocks; Andean Community and Mercosur;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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